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To Rent or to Buy… That is the Question

Bottom Dollar, Housing prices are so low today AND fixed mortgage rates are so low that in almost every city it is now cheaper to own than to rent.  If you have been renting for the past three years and you have kept your credit clean it’s probably time to consider purchasing a new home.  I have listed four reasons you should consider purchasing a new home.

Tax Break, you are allowed to deduct the interest paid on your principal home from your income on your federal income tax return.  Given that on a typical 30 year mortgage the majority of the payment is interest expense, this is a very nice benefit.  Take your income tax return from last year and figure out what percentage of your gross income you paid in federal income taxes,  Then take a years worth of interest on a new home and multiply by the tax rate you paid, divide that number by twelve and reduce your monthly payment by that amount.  Unless you selected a substantially larger dwelling than you currently rent it’s probably less than you pay now.

Quality,  People tend to take care of things that they own more so than when they rent.  In a neighborhood filled with owner occupants like yourself, you will find that the neighbors have a vested interest in keeping up their homes.

Energy efficiency – A new home today is much more energy efficient than an older home.  Improvements in technology and insulation improvements have worked together to lower monthly energy bills substantially when compared to homes built just five years ago.

Equity, When you purchase a home with every mortgage payment you make you are that much closer to owning your home free and clear.  Something that never happens when you rent.

Cash Flow protection/Hedge against inflation – how often have you finally received that long awaited, well deserved raise only to find your rent payments went up as much or more than your pay increased?  When you purchase a home with a fixed rate mortgage your payment is very stable.  The only things that can change are HOA dues, Insurance, and Property taxes.  Both of these things are a very small portion of the monthly payment so the increases tend to be very small and easy to take.

It is true that a home is not a liquid investment.  You can’t convert it into cash overnight but over the long haul, purchasing a new home is an excellent investment and a good foundation for building wealth.  If you currently rent, visit a Maronda Homes Model Center and find out how you can own your own home.

About Tom Greenawalt

Tom is a Licensed Builder in the State of Florida. He has been in the construction industry for 35 years building new homes in Pittsburgh, Washington DC, and Chicago before moving to Central Florida. The majority of Tom's career has on detached housing for entry level and first time move up buyers. He was with Maronda Homes for over 15 years.

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